The issue Trump needs to be talking about
During the first presidential debate, Donald Trump missed out on the perfect opportunity to address a giant problem stifling American prosperity.
A rising number of Americans are unable to start working without first getting a costly government license. These licenses, commonly known as "occupational licenses," shield license-necessary jobs from competition and reduce worker mobility. Occupational licensing has become such a problem for American workers that it has led to calls for reform from both Republicans and Democrats – including Hillary Clinton. Yet throughout his campaign, Trump has not said a word on the matter.
In a new paper on the effects of occupational licensing from the Brookings Institution, Ryan Nunn writes, "Lower wages and higher unemployment rates for unlicensed workers, as well as reduced migration rates for those with licenses, all suggest that the social costs of licensing are larger than many have previously believed."
A contributing factor to the growing "social costs of licensing" involves the costs that aspiring professionals must bear to get a license. A study from the Institute for Justice examined 102 low- and median-income occupations requiring occupational licenses and found that on average, workers pay about $209 in fees and are required to undergo approximately nine months of training.
These onerous fees and mandatory training periods effectively raise the cost of entering a profession. For poor Americans holding multiple low-wage jobs, struggling to pay their basic expenses, these mandatory costs diminish their chances of economic mobility. And while occupational licenses for professionals such as health care providers and nuclear power plant technicians are understandable given concerns for consumer and public safety, many states require their residents to hold licenses to be pre-school teachers, cosmetologists, masseuses, and even hair-braiders.
Occupational licensing is no small issue. The Bureau of Labor Statistics estimates that 25.5 percent of employed Americans need a government license to do their job, a percentage that was roughly five times smaller during the 1950s. In a press release earlier this summer, the White House noted that this explosion in the number of professions requiring a license is due not to an increase in the number of jobs that originally required a license, but to an increase in the number of professions that now require a license.
It is already difficult for poor Americans to attain economic stability, and as the percentage of low- and median-income professions requiring a license swells, it will only get harder.
These laws affect not only people intent on finding employment, but those interested in starting their own businesses. A new study by the Goldwater Institute on the effect of occupational licensing on entrepreneurship notes that "the higher the rate of licensure of low-income occupations, the lower the rate of low-income entrepreneurship."
This giant reduction in economic opportunity and entrepreneurship could be justified if it represented the price of consumer safety, but economists including Sidney Carroll and Robert Gaston find that licensing laws have little to do with protecting the public. Worse yet, Carroll and Gaston write that there is "evidence from several professions and trades that indicates that restrictive licensing may lower received service quality."
According to a poll by the Pew Research Center, 84% of registered voters and 90% of registered voters who are Trump supporters consider the economy the most important issue in making their decision about which presidential candidate to vote for.
The Trump campaign has put forward a variety of proposals intended to promote economic prosperity, including the institution of an "America First" trade policy as well as eliminating the Waters of the U.S. Rule and EPA's Clean Power Plan. Yet these proposals do not address the occupational licensing laws hampering economic growth and mobility.
Since much of Trump's support comes from Americans who see him as the answer to economic stagnation, this omission needs to corrected. Occupational licensing deserves Trump's attention.
Michael Shindler is an advocate at Young Voices. Follow him on Twitter here.